The SEBI (Securities Exchange Board of India) will bring out the guidelines for electronic Initial Public Offer (e-IPO) within a month, Rajeev Kumar Agarwal, whole-time member of the capital market regulator said at an ASSOCHAM event held in New Delhi today.
“The guidelines of an e-IPO are expected in a month and the overall structure would remain more or less the same like that of a normal IPO its just that we would be utilizing the secondary market structure for extending the reach of the IPO,” said Mr Agarwal while addressing an annual summit on ‘Capital Markets: Time to Rejuvenate’ organized by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“The e-IPO will allow the use of the whole secondary market network and the secondary market brokers would be able to upload the IPO forms through their terminals,” said Agarwal.
The top SEBI official also said that the regulator is taking steps to promote the retail participation by energizing the distribution networks vis-à-vis the mutual fund (MF) industry and they would soon be coming out with measures to address the issues and problems being faced by the MF industry.
Earlier talking about the FinMin’s statement over need for insurance and pension sectors to play a pivotal role to boost inflows in the mutual funds industry, Mr Agarwal said that as the ministry has sought the feedback from the industry as to how the funds could be channelized to the mutual fund through the pension funds then only we would be able to take any decisions in this regard as it is at a very premature stage right now.
Talking about the slowing inflow of funds in the capital market, Mr Agarwal said that capital inflows in the domestic economy have been hit by the global economic downturn and there is a need for a policy environment to ensure that funds keep coming.
“Foreign capital flows are very necessary for India more so to bridge the saving-investment gap as we have a savings rate of 35 per cent while our investment rate is 37 per cent, besides ours is a trade deficit economy as our imports surpass our exports,” said Mr Agarwal while releasing an ASSOCHAM-Resurgent India study on capital markets.
“There is a need to mobilize huge resources to meet the country’s requirements and the substantial mobilisation of funds has to come from the private sector preferentially through the capital markets,” said Mr Agarwal.
Sharing his views on the slowdown in Indian economy he said that the situation is not alarming and is merely a temporary phenomenon and there is a need to look at things in the global perspective.
Talking about the slew of measures being taken by the SEBI and the government of India Mr Agarwal said “We are taking adequate steps to protect the interests of the retail investors and promote public participation.”
Earlier, addressing the ASSOCHAM conference Mohd. Haleem Khan, secretary, Department of Disinvestment, Ministry of Finance said that government plans to launch Rashtriya Ispat Nigam Limited's (RINL) initial public offering (IPO) within July. He also added, “Hindustan copper Limited (HCL) stake sale is also likely to happen within this quarter only." "The government is quite optimistic to achieve the target of Rs 30,000 crore this financial year," said Mr Khan and said that the target is very much achievable.
Amid others who spoke during the ASSOCHAM event included: C.S. Mohapatra, advisor in capital market division of Ministry of Finance; D.K. Aggarwal, CMD, SMC Investors & Advisors; Mr U. Venkataraman, co-chairperson, ASSOCHAM National Council for Capital Markets and Mr D.S. Rawat, secretary general of ASSOCHAM.
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